Impact of hydrogen development on mechanical engineering

In June 2020, the German government adopted the National Hydrogen Strategy. With the help of green hydrogen, the energy transition should be driving forward and, in particular, energy-intensive industries become climate-neutral with its use. Germany is joining a large number of similarly politically driven economic development strategies around the world. In Western Europe alone, hydrogen strategies have been proclaimed in nine other European Union countries in the last two and a half years.

Source: IEA, country sources
1 Great Britain’s “Net Zero Innovation Portfolio” as a support program for hydrogen innovations, as of July 2022
2 Investment in green fuel development by the Danish government.
3 As of July 2021, based on the Renewable Energy Expansion Act (REEA)

The targeted climate neutrality rises and falls with the use of green hydrogen, which only requires electricity from renewable energies such as wind and sun. This leads to two essential aspects that are necessary to achieve the desired aims:

  1. Expansion of electrolysis capacities to produce sufficient hydrogen.
  2. Expansion of renewable energies to supply the electrolysis plants with green electricity.

Climate-neutral hydrogen production requires an accelerated expansion of renewable energies

In the mid and long term, the achievement of these aims cannot be covered by a purely domestic energy expansion and new electrolysis plants. Therefore, on the one hand, blue hydrogen (the CO2 produced during blue hydrogen production is captured and stored underground, also known as Carbon Capture and Storage (CCS)), which – other than green hydrogen – produces CO2 as a waste product, will have to be used transitional as an alternative. On the other hand, Germany will have to import a considerable share of hydrogen through energy partnerships with suppliers and countries worldwide.

The European Union’s goal is to gradually install electrolysers with a capacity of at least 40 gigawatts and produce 10 million tonnes of green hydrogen by 2030. By then, Germany wants to double its domestic electrolysis target from the current 5 gigawatts to 10 gigawatts, at a cost of 7 billion euros for the market ramp-up of the required hydrogen technologies and an additional 2 billion euros for international partnerships. Current partnership projects are ongoing in Africa, the Middle East and South America.

But how does this produced and imported hydrogen reach German consumers?

This question highlights another important topic that will occupy politicians and industry in the coming decades: the hydrogen infrastructure. Hydrogen will be transported via various routes. Pipelines are one mean of transport, and intensive tests are currently being carried out to use existing gas infrastructures for this purpose. But conversion infrastructure for hydrogen derivatives, which are easier to transport, are also being planned and tested.

Transport from countries far away will be done by ships carrying, in particular, ammonia and liquid hydrogen. This requires appropriate loading terminals and distribution networks that reach as far as southern Germany. Currently existing and newly built LNG terminals can only be used for hydrogen loading under certain conditions. The extent to which the steels used at the LNG terminals are compatible for hydrogen has yet to be clarified.

Other key infrastructure components are hydrogen refueling stations and hydrogen storage capacities. In 2022, 130 new hydrogen refueling stations were globally put into operation, 45 of them respectively 35 percent in Europe. There are specific plans for 315 more H2 refueling stations worldwide. Globally, 814 hydrogen refueling stations are in operation, 254 of them in Europe, 455 in Asia and 105 in the rest of the world. Germany’s share of the total is 105 H2 refueling stations, which represents a global share of 13 percent at the end of 2022.

There remains one last important topic area to be addressed: the use of hydrogen. End users of hydrogen can come from all sectors, although for energy-intensive industries, as mentioned at the beginning, green hydrogen will represent an essential component of the value chain in the future. These include the chemical industry, the oil and gas industry with its refineries, and the steel and paper industries. But the mobility sector, in particular H2 trucks and buses, can also make its contribution to climate neutrality.

Source: Eurostat, Science Direct, April 2023

How can mechanical and plant engineering participate at this development?

Roughly defined, there are three areas of application for new products and services in mechanical and plant engineering. The mechanical and plant engineering sector can take up various aspects of the hydrogen value chain:

  1. As a supplier of new products such as test modules for regular testing of critical hydrogen infrastructures like pipelines
  2. As a supplier of innovative technologies (including, for example, new fuel cell technologies that can achieve higher efficiencies)
  3. As a hydrogen customer, e.g. using hydrogen to power its own production facilities or within individual production processes

In terms of climate neutrality, hydrogen as an energy carrier is not only an important milestone for energy-intensive industries, but can also be interesting for production processes and product lines in the manufacturing industry. “Green” hydrogen can help companies improve their carbon footprint in the context of sustainability, but can also serve as an energy buffer due to its storage capability. To give an impression of the possible approaches for mechanical and plant engineering, four categories are briefly explained as examples:

1. Development of fuel cell technogies:

Within vehicles and stationary plants, fuel cells are needed for hydrogen use. Companies can assist in the design and manufacture of fuel cell systems, their integration into vehicles and plants, and the development of appropriate control and regulation technologies. Selected projects:

  • Hyundai: Development of the Xcient fuel cell truck, which has also been delivered in a pilot project to German companies since 2022. By 2025, 1,600 units of this truck model are to be produced in Korea.
  • Nikola Motor: Truck manufacturer Nicola Motor plans to launch its first fuel cell truck in 2024. In addition, the energy source hydrogen will be produced in-house in the U.S.; in Germany, for this purpose the company is relying on partnerships.
  • BMW: The BMW Group is starting small-scale production of its BMW iX5 Hydrogen vehicle at the Research and Innovation Center in Munich. In some regions, the first demonstration is planned for spring 2023.

2. Hydrogen plant production:

In the manufacture of plants for hydrogen production and storage, and also for plants for hydrogen compression and storage, machinery and plant manufacturers can help scale the production of hydrogen with appropriate systems and processes. Selected projects:

  • Nel ASA/HH2E: In early 2023, Nel, Norwegian manufacturer of electrolysis plants and the German energy company HH2E, signed a memorandum of understanding for the supply of two 60 MW electrolysis plants used for the production of green hydrogen. Once completed, these plants would be the largest of their kind in Europe.
  • Linde Engineering/Yara: Construction of a 24 MW PEM electrolysis plant for the production of green hydrogen together with Yara.
  • Siemens Energy/European Energy: Construction of a 50 MW PEM electrolysis plant for the production of eMethanol, which will be used, among other things, by Maersk’s first container ship powered by eMethanol. The operator is the Danish company European Energy.

3. Development of hydrogen technologies and products:

The development of hydrogen burners, turbines and drives used in power plants, in industrial processes but also in mobility, can be driven by machinery and plant engineering. This can range from systems for hydrogen utilization within building heating systems to mobility. Selected projects:

  • Innio: As a provider of Net-Zero solutions, Innio is converting its own plants to hydrogen. Starting in 2025, its complete line of engines will run entirely on hydrogen.
  • BMW/Saacke: The BMW plant in Leipzig converted to hydrogen burners from Saacke in 2022. Operations in the paint drying line, thermal afterburning and in the boiler house are planned.
  • MTU Friedrichshafen: Development of a hydrogen diesel engine for marine applications. The first two engines are scheduled for delivery in January 2024.
  • Deutsche Bahn/Fortescue Future Industries: Collaboration between Deutsche Bahn and the Australian energy company Fortescue Future Industries to develop an emission-free ammonia-hydrogen engine to power locomotives.

4. Expansion of the hydrogen infrastructure:

Mechanical and plant engineering companies can support the expansion of renewable energies, H2 terminals and distribution systems, and also hydrogen refueling stations. Selected projects:

  • Linde Engineering: Construction of a hydrogen refueling station at the Port of Hamburg to supply hydrogen for heavy-duty vehicles, forklifts and other terminal equipment.
  • Maximator Hydrogen: As a manufacturer of hydrogen refueling stations, the company is participating strongly in the increasing expansion of the H2 refueling station network. In 2022, the company has received an order from the Swedish company REH2 to supply 24 H2 refueling stations.

Conclusion: Hydrogen technology offers numerous potentials for both manufacturers and end users. Overall, the success of this technology depends on the rapid scalability of green hydrogen and the strong reduction of the currently still high price of hydrogen. However, due to the worldwide activities around the topic of hydrogen, an enormous push can be expected for the coming years.

Silke Hänisch, Market Intelligence Senior Expert